§ 39 — Investment policies for local governments

§ 39. Investment policies for local governments. 1. Each local\ngovernment, which for purposes of this section shall include counties,\ncities, towns, villages, school districts including boards of\ncooperative educational services and district corporations, within the\nmeaning of that term as set out in subdivision three of section\nsixty-six of the general construction law, or any other governmental\nsubdivision of the state, shall by resolution adopt a comprehensive\ninvestment policy which details the local government's operative policy\nand instructions to officers and staff regarding the investing,\nmonitoring and reporting of funds of the local government. The\ninvestment policy shall be annually reviewed by the local government.\n 2. Funds of the local government, for purposes of this section, shall\nconsist of all moneys and other financial resources available for\ninvestment by the local government on its own behalf or on behalf of any\nother entity or individual.\n 3. The investment policy adopted by the local government shall\ninclude, but not be limited to, the following:\n (a) A list of the permitted types of investments of the local\ngovernment, which shall be consistent with the appropriate provisions of\nlaw relating to the local government and any additional requirements\npursuant to any contract with bondholders and noteholders or established\nby the local government.\n (b) Procedures and provisions to secure in a satisfactory manner the\nlocal government's financial interest in investments.\n (c) Standards for written agreements pursuant to which investments are\nmade. Such standards shall be consistent with the appropriate provisions\nof law relating to the local government and any additional requirements\npursuant to any contract with bondholders and noteholders or established\nby the local government.\n (d) Procedures for the monitoring, control, deposit and retention of\ninvestments and collateral.\n (e) Standards for security agreements and custodial agreements with\nbanks or trust companies authorized to do business in the state of New\nYork, pursuant to which obligations and collateral are held by such\nbanks and trust companies for the local government. Such standards shall\nbe consistent with the appropriate provisions of law relating to the\nlocal government and any additional requirements pursuant to any\ncontract with bondholders and noteholders or established by the local\ngovernment.\n (f) Standards for the diversification of investments, including\ndiversification with respect to the permitted types of investments\nlisted in accordance with paragraph (a) of this subdivision and to the\nfirms with whom the local government transacts business. Such standards\nmay also specify the maximum percentage of moneys available for\ntemporary investment or the maximum dollar amount that the local\ngovernment is authorized to invest in any one permitted type of\ninvestment or pursuant to transactions with any one firm.\n (g) Standards for the qualification of firms with whom the local\ngovernment transacts business, such as criteria covering\ncreditworthiness, experience, capitalization, size and any other factors\nthat make a firm capable and qualified to transact business with the\nlocal government.\n (h) For purposes of this section, the term "firm" shall include, but\nnot be limited to, a bank or trust company as defined in subdivision one\nof section ten of this chapter, the lead participant of a cooperative\ninvestment agreement as defined in subdivision one of section\nforty-nine-c of this chapter, and the seller of an obligation that is\npurchased pursuant to a repurchase agreement.\n 4. Each local government shall have the power to amend its investment\npolicy from time to time in accordance with the provisions of this\nsection.\n